PC Shipment Growth to Slow in 06, Report Shows

Notebook PCs will help drive double-digit unit gains in PC shipments during 2006, a new report by International Data Corp. says.

Despite a dip in growth, due in part to waning sales to businesses and slower overall economic growth expected in 2006, IDC says notebook PCs will help drive worldwide PC unit shipments to 229.5 million units, an increase of 10.5 percent from 2005s predicted total of 207.7 million unit shipments.

The Framingham, Mass., company, which regularly updates its PC shipment predictions, upped its expectation for 2006 shipments to a bump of 10.5 percent versus its previous expectation of a 9.1 percent increase.

Portable PCs, whose popularity among business and especially consumers has grown in recent years, will continue to push up shipments following 2006.

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The machines will have gained enough momentum to cross over and eventually begin shipping in greater numbers than desktops for the first time in the United States by late 2008 or 2009, said IDC analyst Richard Shim.

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IDC predicts notebooks and desktops will end up at a 50-50 split in the U.S. market in 2008, with each category shipping about 38 million units. But, by 2009, portable shipments will grow to almost 44 million, while desktops fall to about 36 million, Shim said.

The shift toward portables represents a natural evolution of the U.S. PC market as consumers interest in portability increases and businesses roll out laptops to more workers, he said.

"That transition is driven by both markets," Shim said. But "consumers are becoming a growing force in the adoption of notebooks…driven by lower prices and the typical high demand for portability."

Although not as pronounced on a worldwide basis as it is in the United States or Japan, where notebooks already outship desktops according to IDC, global notebook unit shipments will continue to increase in the coming years.

By 2009, IDC expects the portables to garner roughly 42 percent of shipments or about 121 million units out of a total of about 287 million, Shim said.

Still, despite an upward trend in notebooks and the potential to extend a streak of double-digit growth to four years, 2006 could make for a tougher year than 2005 in some respects.

IDCs unit shipment growth forecast of 10.5 percent for 2006 is several points lower than the two previous years—2004 saw shipments increase by 15.3 percent and IDC forecasts 2005 will end up at 15.8 percent—and "shipment value" or revenue industry revenue will grow by only 3.5 percent in 2006, the firm predicted.

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Slowing industry growth could make it more difficult for PC makers to grow while fending off competitors.

Indeed, thats why a lot of vendors will emphasize the notebook market where measures such as shipment growth and revenue offer larger opportunities than the rest of the market, Shim said.

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